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Compañía de Minas Buenaventura (NYSE:BVN) +2.1% in Thursday's trading as Morgan Stanley upgrades the stock to Overweight from Equal Weight with a $10.30 price target, citing an operational turnaround and improving balance sheet.
Morgan Stanley's Carlos de Alba believes Buenaventura (BVN) is finally turning around its directly controlled operations after several years of operational struggles, with the ramp-up of the Uchucchacua and Yumpag projects.
The analyst also expects Buenaventura (BVN) will receive sufficient dividends from Cerro Verde to fund its San Gabriel project while reducing its leverage, seeing ND/EBITDA declining to 2.1x by year-end 2024 from 4.3x at the end of 2022.
The bank's new estimates point to slightly positive free cash flow generation next year, before increasing even further in 2025.
Teck Resources (TECK) remains de Alba's top mining pick, seeing value in Teck's asset base and free cash flow rising in coming years following completion of QB2 that may result in higher dividends ahead.